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Project FB

Minimal Viable Product versus Minimal Viable Business Model

During this year I have been working with a small team to build a minimal viable food brand and product for testing.  I have written about this journey under the title Project FB.  Early results appears pretty good.  We learnt lots about the product, the right recipes and flavour combinations.  We tried different ingredients and different suppliers.  We learnt more about the product than just this, we learnt how to sell it, what support you need, and how it performs in a small retail environment.  All of this is very encouraging and very valuable.

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The Importance of Winning at Product Level

Brands are an essential vehicle for getting consumers to love your product and buy into your values, but they become even more valuable if the product is truly best in class too.  In the food industry a great test is to say, “if my product was tasted alongside everyone else’s without packaging or branding, would mine still come out as the best one to buy?” If so you are in a strong position, because you can still overlay a great packaging format, a great brand with strong values and recognisable packaging, a competitive price, all to add even more competitive value and differentiation.

To find out just how good your product is, it is perhaps worth considering how the brain senses may evaluate your product.  So as an example using food, get your product out on the table alongside all your competitors and ask:-

Does my product look truly more appetizing than anyone else’s?

Does the smell of my product get my taste buds more excited than the smell of any other product?

Do I win on great taste?

Is the texture and feel of my product better than the competition?

If you can answer yes to all of these you have a winning product with the potential  to be underpinned with great branding and great marketing!

Looks good, smells good. feels good, tastes good…… probably is pretty good!!

Proto-type Research And Testing Versus The Retail Environment

Project FB – Update.

Since my last blog post about Project FB, concerning the “lowest cost viable product” with which to go and test the market, things have been moving in a positive direction.  Our testing and proto-typing has led to changes in suppliers, improvements to our packaging, changes to pricing, and finally a set of products we have confidence will work in a retail environment.

But retail is a very different environment to the areas where most product testing takes place.  We have done all of our market testing at local markets where you pay to spend a day listening and selling to customers but other routes we could have taken include more traditional market research including focus groups, or perhaps a larger scale test targeting one market segment with a full launch and evaluation.  Whilst any method will give you answers it will also give you challenges.

We have recently been working with one retail outlet to see how our product would perform and what we needed to do to get the right rate of sale for the product to earn its place on shelf.  Here are some insights for anyone facing similar challenges.

1)      Rate of sale is the only measure that really counts.  Your product must earn its space on shelf.

2)      Having a relationship with the store manager is key.  You must make sure everyone realises where the business is on the journey, what you are trying to achieve, and why it is worth it for both parties.

3)      Make sure you have the flexibility to move your retail price – it is likely that pricing in the retail environment will need to be lower than it first appears, however do not sacrifice your premium without understanding the rationale behind any move.

4)      The hardest thing about retail is that your product is stripped bare.  You are not there to promote it, talk about it, and sell it.  You much do everything to ensure a) the packaging does that job for you, b) you can maximise any opportunities in store to get your product noticed.

Since working with one retailer we have had to reduce our price point as customers felt the product to be too expensive.  Our tests at markets would have suggested a higher price point was sustainable, but I think customers evaluation of goods changes depending on the environment they are in and the kind of shopping they are doing.  We adjusted our packaging to simplify the messages and make the flavour names clearer.  We added posters in store to get people’s attention.

All this is not enough.  We are currently looking to add a sub-set of branded messages to a shelf strip and branded tray that will house our product and give even more impact on shelf.

On a busy shelf, full of products, how does my brand and product get noticed?

Getting a product right in retail is a critical success factor but I think any business regardless of size and financial resource can only maximise the retail opportunity by first understanding what is the right mix of price and promotional mechanics to generate the best rate of sale.

The Lowest Cost Viable Product

Project FB – Update.

So recently we have completed what I would describe retrospectively as the nice, exciting, and even easy parts of starting a business.  We have done the brain storming, looked at the opportunities and evaluated them, come up with the ideas and concepts.  Finally having considered all of this, we have said OK – this is our product, our idea, our brand.

It has several advantages.  The product sits in a category that has been highly commoditised, so we can offer a premium alternative and refresh the market. The product does not currently seem to exist in a premium fashion; it isn’t like producing another niche beer, another premium meat pie, or another special cake.  So everything sounds like a good opportunity exists, but this is where the challenges really lie.

How does one go about converting the idea into a tangible product at low cost to gauge consumer feedback?  I have read a lot recently about a concept called “the lowest cost viable product”.  In essence this is saying, what are the bear essential aspects, ingredients, or materials that are needed to produce something that can be used to gauge consumer opinion?  Whilst this may sound like just a sensible approach to buying an initial proto-type it is actually a much deeper thought than that.  This is because it fights in the face of a person’s natural tendency to want the product to be received well and therefore engineer in un-necessary and costly attributes that are not needed or perhaps not relevant to the consumer or customer.  The challenges we have faced include under pricing the product and being too easily moved into reducing the price point, over packaging the product to give a premium feel, providing un-necessary marketing support material, a tendency to rush the flavour development process, and a drive to bring too many flavours to market too early.

My learning from the process is simple but very valuable.  Use other people to sense check what you believe to be essential purchases or aspects of a proto-type.  Don’t assume you know what the consumer expects, start bare and then work up if you need to.  Resist calls to lower price at least until you have let real consumers have their say.  And be comfortable with accepting you may still be working with a proto-type even when others start to think of it as a finished product – keep listening and refining.

The next challenge…. if we have a brand and product that people like….. can we build a business model that is robust?

Finding Consumer Groups That Mobilise Your Brand

We have all been hearing recently about “the big society”.  But I was thinking that haven’t we always had a kind of big society, that is pockets and groups of people who are happy to get together to help make something happen or support a particular cause?

Over the last thirty years we have seen brand after brand align itself behind a particular cause or charity and then build a customer following of people who also share in that cause, charity or belief.  With the emergence of social media tools and an explosion of information from both the internet and digital TV it has become easier to communicate with likeminded people, build a pool of people, and build a plan to make something happen.

I think that businesses with strong brands have a real opportunity here to get involved in “the big society” because of this.  If a business / brand can find a problem that they can help to solve and then engage with a group of like minded individuals who are willing to also help, is there not an opportunity to marry up the resources of business with the resources of people and make something happen?  I think the trick is to identify the audience that can mobilise each other into action and identify the problem and solution that motivates them and make sure all of this fits with the brand.

For example, many premium food brands tend to target “foodies”.  There is a growing concern that young people in the UK do not know where food comes from.  Does this not offer premium food brands an opportunity to engage with farmers, gardeners, allotment owners, and somehow build an education platform for schools to tap into?  Would a food brand that developed such an educational programme involving food growers a) educate young people b) build stronger relationships with key suppliers c) build a new following of consumers from a non foodie community such as gardeners?

Consumers of products are buying into more and more causes that are interesting, compelling and relevant to them – because the internet enables them to.  Marketers have an opportunity to respond to this and consider multiple segments to target for mobile, active and engaged consumers.

How They Started

How They Started Book CoverI read this book to try and get a broad sense of the conditions under which a number of the most successful businesses in the UK have started.  It is an interesting read as it shows many examples of business start-ups in some very different industries with some very different conditions in play at the time.

The book does give you a useful set of hints, tips, pieces of advice and insights that can be used when developing a plan for starting up a new business.  Although there is no common theme between the businesses or the way they managed to overcome different challenges, what the book suggests to me is that there is no one formula that can be used to predict whether a start up will succeed or fail.  Clearly there are some personal characteristics or attributes that may make it more likely but even in this area the broad spectrum of business leaders makes these assumptions difficult.

The book also covers a number of models for both starting out and expanding.  It covers businesses with low start up funds but almost immediate income through to businesses requiring substantial upfront investment and the challenges that can bring.

Interestingly the book does quote a number of web-based companies from the mid nineties.  In all cases whilst at the time of writing these appeared solid businesses with a bright future, they were all sold for multi-million pound sums, in 2010 the value of these businesses has reduced dramatically.  I think the out-take here is the genuine innovation in a market is almost impossible to predict by definition, and therefore when valuations are made based on the current market situation and the current state of innovation there is always a risk, particularly in technology markets, that a “game changer” will enter with new technology which has an immediate impact and bearing on the whole market.

Some of the great brands included in the book are Gu, Cobra Beer, Cotton Traders, Pizza Express, Psion, Dyson, and Sage Accounting Software.  An interesting easy read.

A New Adventure – Project FB

Marketing Consultant Norman Comfort takes on a new project!

This week I have started work on a new project.  A small of team have developed a proto-type product which is receiving positive feedback from its target consumer and customer.  The challenge is to take this idea, with all its positivity and possibility, and translate that into a commercial, successful business.  My main input will be as a Marketing specialist or consultant, helping to develop the brand, its packaging, the key messages, identifying the main market segments to target, and trying to help gain that all important sales momentum.  Alongside this focus, I will be using my MBA and business experience to give broader leadership to the project.  Along with others in the team we will try and solve the issues which face all new businesses:-

–          How do we fund initial product development?

–          How do we robustly assess the product and how much potential customers really like it?

–          How do we build an infra structure for the business?

–          What resources do we need and what is the most effective way to buy those in a small business which has limited cash reserves?

I will be thinking about what I have learnt from reading books like Good to Great and Built to Last, from my MBA and Marketing Diploma, as well as the team building and project development strategies I learnt through Common Purpose.

More than that I hope that this part of my blog will become an interactive area where as people read and understand the challenges we face, they will interact and become participants in their own right, coming forward with their own experiences and suggestions.

It’s going to be a great journey – a chance to implement some learning’s gained, as well as gain some new insights “on the job”.

For reasons of confidentiality, I shall refer to this project as “Project FB”

Norman Comfort

Marketing Consultant